Tax holiday to cost Connecticut $7.5M

Published 12:00 am, Sunday, August 19, 2012

Sunday kicked off the Connecticut's annual sales tax holiday, and the state's consumers took to Twitter to either express their excitement or complain that they couldn't take advantage of it.

"It would be tax-free week and I would be completely broke," Alex Nestro of Danbury tweeted Sunday.

Megan Duncan offered a similar lament but not because she was short of cash.

"We'll be in Mass. for half of it," Duncan tweeted, using the hash tag "shopping all Monday and Tuesday."

State officials estimate that consumers will save as much as $7.5 million by avoiding having to pay sales tax on certain items by the time the week ends with the close of business on Saturday. The sales tax holiday comes in the midst of a back-to-school shopping season with families expected to spend nearly $700 per student on clothes and supplies.

"It gives consumers a warm and fuzzy feeling because not only are they saving money, they're doing it on items that they're buying for loved ones," said David Cadden of Cheshire, who is a management professor at Quinnipiac University's School of Business. "The state gets good PR because it shows they understand the needs of working families."

The state's sales tax holiday comes with the following stipulations:

--Individual items of clothing and footwear that cost less than $300 are completely exempt from state sales tax. Purchases of sports equipment, specialty clothing, jewelry and accessories are not covered under the sales tax exemption.

--Store sales, catalog and on-line purchases are exempt, as well as those done via layaway or through rentals.

--The tax-free holiday week includes items valued at more but discounted to under $300 with sales, coupons and similar merchant promotions.

Kevin Sullivan, the state's commissioner of the Department of Revenue Services, said the sales tax holiday provides a dual benefit for Connecticut's economy.

"This is a great opportunity for consumers to stretch their tight household budgets and make the kind of purchases that are always necessary at this time of year," Sullivan said. " In addition, this is a good shot in the arm for our merchants, especially those that help attract shoppers who can maximize the tax exemption through discounted pricing."